In a surprise move, Qualcomm and Apple have announced an agreement to dismiss all ongoing litigations, including with Apple's contract manufacturers, between the two companies worldwide. The deal would result in a massive cash windfall for Qualcomm and put Apple on a faster path to 5G for iPhones. The companies have reached a global patent license agreement and a chipset supply agreement, Apple said in a statement on late Tuesday.
"The settlement includes a payment from Apple to Qualcomm. The companies also have reached a six-year license agreement, effective as of April 1, 2019, including a two-year option to extend, and a multi-year chipset supply agreement," said the Cupertino-based iPhone maker.
The Apple-Qualcomm agreement was reached after chip-maker Intel decided to exit the 5G smartphone modem business and complete an assessment of the opportunities for 4G and 5G modems in PCs, Internet of Things devices and other data-centric devices.
"It's likely Intel's decision prompted Apple and Qualcomm's decision to settle -- which came as quite a surprise since it happened just as lawyers were presenting opening arguments at the latest courtroom trial," The Verge reported.
"We are very excited about the opportunity in 5G and the 'cloudification' of the network, but in the smartphone modem business it has become apparent that there is no clear path to profitability and positive returns," said Intel CEO Bob Swan.
Apple and Qualcomm have been fighting over Qualcomm's patent licensing practices for the last two years. Apple wanted to pay a lower amount for using Qualcomm technology in its devices. Qualcomm responded by suing Apple for patent infringement and seeking a ban on sales.
"For the most recent iPhones, Apple relied exclusively on Intel to provide the devices' modems since it couldn't reach an agreement with Qualcomm," the report said.